iPod buyers not music to Apple's ears

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There's no doubt that despite its comparative size, lack of
historical stature and relatively small sticker price, the iPod has
completely transformed Apple.

The fact that the company sold more than 2 million of the
portable music devices in the most recent financial quarter, to
take it to 92 per cent of the market for hard-disk music systems,
confirms that Apple is no longer so much a computer company as a
digital entertainment company. Even The Wall Street
Journal acknowledges the transition.

It's good news for Apple, because the entertainment business is
far more profitable than the computer business. While the company's
total revenue was up only 37 per cent, its profits doubled,
indicating the much higher margin Apple earns from iPods compared
to the iMac, for instance.

Sadly, Apple's retailers aren't enjoying the same returns.
They're still stuck on the pitiful 8 per cent that makes their
existence more than a little fragile. They're probably only
surviving on the thriving trade for iPod appliances, where the
mark-up is probably somewhat higher.

In that and one other respect, Apple is still a computer
company: from time to time it still treats its customers badly.

Apple's quality control is better than the average and its
products generally perform very well but they're by no means
perfect. Over the years we've reported on a range of software and
hardware faults. The company has mostly failed to acknowledge
them.

It has been able to get away with this in the past because of
extraordinary forbearance by its customers. Indeed, Apple doesn't
really have customers so much as disciples. Journalists who dare to
criticise the company or its products can expect a flood of
insulting emails from users.

The danger for Apple is that it might expect this attitude to
continue. Now it's in the entertainment business, it won't. These
new customers aren't one-eyed Apple supporters and they're going to
expect a more immediate response to problems.

There have, for instance, been widespread reports that some
fourth-generation iPods suffer from audio defects. So far, news of
the problem - a whirring sound in the user's earphones and several
seconds of light static at the start of a song - has been largely
confined to discussion on one of the most popular iPod sites,
ipodlounge.com.

As the posts there indicate, Apple has been aware of the issue
since July. Its only response, in September, has been: "Apple does
not have any comment at this time."

When we sought a response from an Australian representative, she
simply didn't return the call.

A number of users who have returned their iPods to Apple have
had the fault repaired. There are suggestions it is a comparatively
simple issue, caused by the top metal ring on the headphone jack
coming into contact with the metal case.

The real problem is that Apple isn't letting its customers know.
We're pretty sure the fault isn't widespread but, while the company
refuses to comment, no one can be sure. There's no doubt from the
response to the ipodlounge forum that it is causing some potential
customers to hold off.

It doesn't stop us recommending the iPod. It doesn't stop us
recommending iTunes for both Mac and Windows operating systems. But
it does make us wonder if Apple will ever truly stop being a
computer company.

If you buy an iPod, follow the instructions at ipodlounge.com to test for the defect.
If there is something wrong, take it back.